AC Transit paying the rent for chief's East Bay flat

Dan Goodin, SPECIAL TO THE EXAMINER

Published 4:00 am, Monday, June 5, 1995

AC Transit, the East Bay's financially troubled public bus system, is paying $600 per month to rent an Oakland-area apartment for its $140,000-per-year general manager so she won't have to commute to her home 45 miles away in Fairfield, according to public records and interviews.

AC Transit District records show that since 1991, the agency has spent nearly $15,000 on overnight accommodations in the Oakland area for General Manager Sharon Banks.

About $6,500 of that was spent to put Banks up at the downtown Parc Oakland Hotel on work nights, the records show.

The rest has gone for an apartment that Banks rented in 1994 so she would have a place to stay on nights when she doesn't want to drive home to Solano County after work, two directors said.

In addition to the apartment rental, Banks is paid an annual salary of $133,000, plus $7,500 per year in deferred compensation and other benefits. The district also paid nearly $10,000 in the past year to send Banks on business trips that took her away from Oakland for as many as 54 days.

AC Transit has a long history of financial troubles, and recently Banks told the board to brace for an $11 million operating deficit in the upcoming fiscal year.

The budget crunch, which Banks blamed on sharp reductions in government funds to the district and higher operating expenses, may force the district to eliminate weeknight service after 10 p.m. and weekend service on most AC Transit routes, she said.

Banks refused repeated interview requests for this story. Two AC directors, John Woodbury and Ruth Ganong, acknowledged that AC had been paying rent on an apartment for Banks. They defended the arrangement as a good deal for the transit district.

"The fact is we get more hours of work out of her this way because she spends less time commuting," Woodbury said.

Director wants probe&lt;

But Director Clinton Killian said he knew nothing about renting an apartment for Banks. He called the matter

"disturbing."

"It was my understanding that the local hotel allowance was to be used on an occasional basis," Killian said, referring to Banks' stays at the Parc Oakland.

He said he believed that the lodging allowance "is not for an ongoing time and we're not paying for a second residence, which in essence is what I'm hearing. I find this real disturbing."

Killian said he would call for an investigation into the matter.

While AC Transit officials acknowledged that the district is making rent payments for Banks, they refused to identify her landlord or say in which city her apartment is located.

In response to a request filed under the state's Public Records Act for documents regarding Banks' rental, district officials produced handwritten receipts with key information blacked out.

General Counsel Ken Scheidig said the information was withheld because Banks was concerned about personal security. He said the agency would not release uncensored copies of the receipts unless ordered to do so by a court.

"It seemed reasonable'&lt;

The Oakland-based AC Transit District was established by the state Public Utilities Commission to run public buses in Alameda and Contra Costa counties. It moves more than 230,000 passengers per day with more than 700 buses and 2,000 workers. Its annual budget is over $140 million, with nearly two-thirds coming from state and local taxes. Its operations are overseen by an elected board.

In April the Alameda County Grand Jury criticized AC's board for providing Banks with what it called an overly generous and "open-ended" severance package of more than $140,000 in vacation days and other benefits. District officials called the criticism unjustified.

Banks began working for AC Transit in 1990 as interim general counsel. She was hired as general manager in May 1991. Before coming to AC Transit she was an attorney at a Palo Alto law firm. Banks also has worked as a speech pathologist and elementary school teacher in Vallejo.

Banks and her husband bought the home in Solano County in 1990, according to county records. At the time, Banks was already working at AC Transit as interim general counsel and interim general manager.

A clause in Banks' 1991 contract gave her up to $500 per month in local lodging "in connection with, or as a consequence of, her duties as General Manager." In December 1994, the contract was amended to increase the monthly limit to $600.

Director Ganong said that in 1991 the board had been

"desperate" to find a general manager to replace veteran executive Jim O'Sullivan, who resigned, and directors offered the housing allowance to induce Banks, who had recently bought her house in Fairfield, to take the job in Oakland.

"It seemed reasonable to give her $500 a month to have a place to stay when meetings went too late," she said.

Director Woodbury said the arrangement allowed the district to avoid paying Banks moving expenses or relocation fees.

"From a policy point of view this is the cheapest deal around," Woodbury said. "(Banks) often works until midnight or one in the morning or else starts the day at three or four in the morning.

"It made no sense for her to drive home for two or three hours just to turn around again."

District records show that during the first 32 months of the arrangement, Banks billed the district about $200 per month for an average of less than three nights a month at the Parc Oakland Hotel.

Reports submitted by Banks to the district for this period note the date of the hotel visit and the circumstances that kept Banks in Oakland late, usually board meetings that ran until 10 or 11 p.m.

Beginning in February 1994, Banks stopped submitting itemized receipts, and began showing a monthly apartment rent of $700, for which AC reimbursed $500 or, starting with the rate hike approved in December, $600.

Since February 1994, the average cost to the district for Banks' stays in Oakland has been more than $530 per month.

Other district records show that Banks billed the district $9,980 for job-related travel in the 12 months ending March 1995, the last date for which records were available. The trips, to Washington, D.C., Boston, Phoenix and San Diego, took Banks away from Oakland for part or all of 54 days.

During that time she made three separate trips to Washington, staying 17 days to attend functions of the American Public Transit Association and the Amalgamated Transit Union. In March, she billed the district $2,623 for a week in Washington attending APTA and ATU functions.

Two weeks ago the district's Board of Directors held a budget workshop where Banks told them to expect at least an $11 million deficit. As a result, Banks said, the district will likely eliminate weeknight service after 10 p.m. and weekend service on most AC Transit routes.

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She said staff reductions through layoffs or early retirement are possible, as are the sale of nonessential equipment and property, even leasing office space at the district building at 1600 Franklin St., Oakland.

AC Transit will have to "live within its means," Banks told directors. "We're going to be smaller, but we're going to be better." &lt;

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